US Stocks Post Year's Second-Biggest Gain As Euro Fears Ebb

KristinaPeterson

NEW YORK (MarketWatch) -- U.S. stocks surged Thursday, posting their second largest gain this year as fears of eurozone contagion receded and investors flocked back to riskier stocks, lifting shares of technology companies including Intel and Microsoft. American Express also jumped, boosted by an analyst upgrade.

Bolstered by a late surge, the Dow Jones Industrial Average rose 284.54 points, or 2.85%, to 10258.99, its second-largest point and percent gain this year. Technology components jumped Thursday as a willingness to buy riskier assets returned after reports that China was mulling selling its European bond holdings were dismissed by the Chinese government. Intel rose 1.06, or 5.1%, to 21.76, on the Nasdaq.

Microsoft (Nasdaq) also surged, adding 99 cents, or 4%, to 26.00, after FBR Capital upgraded the stock to outperform, pointing to a cycle of products that are expected to boost sales as workplaces upgrade their computer systems. The surge helped erase some of Microsoft's Wednesday losses after its market capitalization slipped below that of rival Apple.

Financials benefited as fears eased over Europe's debt woes. The Spanish government's approval of budget cuts helped restore confidence that the debt problems could be contained. Bank of America gained 71 cents, or 4.6%, to 16.18. J.P. Morgan rose 1.64, or 4.2%, to 40.42. American Express jumped 2.16, or 5.7%, to 40.33, boosted by an upgrade from Sandler O'Neill, which moved the credit-card issuer to buy from hold, saying the company's affluent customer base is likely more resilient to unemployment.

All three major market measures had their biggest point and percent gains since May 10. The Nasdaq Composite advanced 81.80 points, or 3.73%, to 2277.68. The Standard & Poor's 500-share index gained 35.11, or 3.29%, to 1103.06, climbing above the key 1090 level it struggled to maintain on Wednesday. All of the index's components closed in the black, led by financials and energy stocks.

Boosting the energy sector, crude-oil prices leapt more than 4%, to settle above $74 a barrel on Thursday, in their biggest one-day dollar and percent gain since September 2009. President Barack Obama said action on 33 exploratory drilling operations in the Gulf of Mexico will be suspended. American depositary shares of BP jumped 2.97, or 7.0%, to 45.38 after the U.S. Coast Guard said the company's "top kill" maneuver was helping to stabilize the oil spill in the gulf.

Investors said Thursday's encouraging overseas news was helping to shift focus back to the U.S. economic recovery.

"All those things are giving the market hope that the sovereign debt issue is probably behind us and is not going to create a world contagion whereby they're going to hurt the recovery here in the U.S.," said Joe Heider, principal at Rehmann in Cleveland, Ohio.

Heider said he saw the market's recent slump as a natural correction within a bull market and that fears that the debt crisis in Greece would spread were overblown. "We're talking about an economy in Greece which makes Ohio look like a major world player in terms of our GDP," he said.

Luxury jewelry retailer Tiffany climbed 3.27, or 7.5%, to 46.86, after its fiscal first-quarter earnings more than doubled, beating analysts' expectations. The company saw a resurgence in its U.S. sales and raised its earning projections for the year.

Agribusiness giant Monsanto slid 2.39, or 4.5%, to 50.27, after slashing its full-year earnings expectations by more than a fifth and projecting fiscal third-quarter results below Street expectations. The company also plans to cut prices and reduce the number of varieties of its Roundup weed killer as competition from similar generic products increases.

Discount retailer Costco Wholesale (Nasdaq) rose 2.76, or 4.9%, to 58.74, after its fiscal third-quarter earnings rose by nearly half as sales and membership fees increased. The company's legal costs fell and it benefited from a tax-related gain.

Women's apparel retailer Dress Barn (Nasdaq) added 1.20, or 4.5%, to 27.83, after its fiscal third-quarter earnings more than doubled. Sales were boosted by its new Justice brand, which caters mostly to preteens.

American depositary shares of Tata Motors, which controls the Jaguar and Land Rover luxury-car brands, rose 1.37, or 8.7%, to 17.05, after posting a consolidated net profit in the fiscal year ended March 31, from a loss in the previous year. The recovery in global vehicle sales and one-time gains outweighed an increase in raw-material prices.

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